Verified integrity. Still happens. This happened when I first downloaded steam and their game pack that included l4d2. I did a process where I deleted everything but steam.exe and a folder I think and it repopulated everything and then worked. Now it's doing it again. Not much I love more than an UNKNOWN ERROR

Try to delete ClientRegistry.blob file.It is in the primary folder C:\Program files\ Steam. Move it for any case to other place though. Restart Steam. This solved problems with some games I had when verify cache was useless.